A mutual fund generates a 11.9 percent return. During the same period, the market rose by 7.4 percent. If the risk-free rate was 3.5 percent and the fund had a beta of 1.4 (a). Did the fund outperform the market?  (b) How did you arrive at this conclusion?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 12P
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A mutual fund generates a 11.9 percent return. During the same period, the market rose by 7.4 percent. If the risk-free rate was 3.5 percent and the fund had a beta of 1.4
(a). Did the fund outperform the market? 
(b) How did you arrive at this conclusion?

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